The present invention relates to the use of networked computer systems for implementing an on-line trading market for the selling and purchase of goods and services
The Internet is profoundly changing business realities. One of these profound changes is the shift in power from seller to buyer. Increasingly, buyers, whether consumers or businesses, are made aware of alternative sources of goods and services, and are able to leverage this knowledge to command better buying terms. Online comparison shopping services, such as Junglee, Jango, and mySimon, are good illustrations of this reality. Because of the availability of these well-known comparison shopping services, other services have been made available for inviting buyers to quote prices. There are several conventional services, among the best known being Priceline.com, which allow buyers to quote prices and invite sellers to accept the quote. Indeed, Priceline has been granted a patent in connection with such activity (U.S. Pat. No. 5,794,207).
A further edge is afforded to buyers by their ability to assemble into online communities of interest, and leverage this network to their commercial advantage. A straightforward way to leverage the community is through exchange of information. A more elaborate way to leverage the community is to aggregate the buying power of its members. There is already an implicit aggregation of buying power within communities. A service provider such as America Online is able to negotiate price discounts from vendors based on its very large subscriber base. The problem in such a situation is that the parties have no knowledge in advance of the actual buying volume; this limits the negotiating power of the service provider, and the willingness of the vendor to discount the price.
Thus, an apparatus is needed for facilitating the aggregation of buyer power in an on-line trading market system serving traders communicating via the Internet and similar networks.
The Online Buyers Club System (OBCS) is a mechanism for the online purchasing of goods and services. The mechanism is targeted at user communities consisting of a large number of small-volume buyers (the xe2x80x9cBuyers Clubxe2x80x9d). The primary function of the mechanism is to automatically aggregate the buying power of these buyers. The present invention provides a mechanism to promote competition among vendors as well as a mechanism to incent buyers to make a purchase.